I've got a picky set of hardware, which play's AVI-files, but only if they're smaller than 720px, encoded with XviD, and a low enough bitrate. A DVD-player which can play stuff from USB etc. as well.

I can't recall the exact reason I upgraded to ~amd64-keyworded 1.0.6 ffmpeg, instead of the stable 0.10.7, but there was a reason of some sort.

I used to be able to create compatible videos with the following command: "ffmpeg -i MOVIE.mp4 -vtag xvid -vf "scale=720:-1" MOVIE.avi". And indeed that still successfully encodes a video that looks fine on the computer, with ffmpeg 1.0.6, but unfortunately it does not play on the hardware. It doesn't display any error messages or some such, so it's a tad difficult to discern exactly what's wrong.

Anyone here have any suggestions of a set of encoding variables for creating a AVI which might work?

if u don't have a proper description, what your player can play, this could be a bit hard.
but with your commandline, the video file won't be reencoded, so if it doesn't have the right codec already, it won't have it afterwards. You only change the containerformat from mp4 to avi and write in the avi file, that the video is divx encoded no matter what it really is.
So first check what your file really contains (eg ffprobe movie.mp4) if it isn't divx u need to encode it

Thanks for chiming in, Christian99! Are you sure it doesn't re-encode? Well, let's add "-b:v 1500k", and it does it for sure. Yes, difficult to figure out! I was hoping someone would know what had changed between ffmpeg, v0.10 and v1.0.6 which could explain it.

not really, i just assumed it because u didn't give a video codec.
I just tried here without giving a video codec and here ffmpeg seems to choose x264 as "default" codec. What does the ffmpeg output look like at you? which codec is mentioned?

EDIT: ok the codec used depends on the output container too. if avi is used as output container, xvid is choosen as codec. So, this seems to be right.
So forget what i said